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Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data. BUSINESS SOLUTIONS Income
Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data.
BUSINESS SOLUTIONS | ||||||
Income Statement | ||||||
For Three Months Ended March 31, 2020 | ||||||
Computer services revenue | $ | 24,807 | ||||
Net sales | 17,993 | |||||
Total revenue | 42,800 | |||||
Cost of goods sold | $ | 14,652 | ||||
Depreciation expenseOffice equipment | 380 | |||||
Depreciation expenseComputer equipment | 1,210 | |||||
Wages expense | 2,950 | |||||
Insurance expense | 505 | |||||
Rent expense | 1,975 | |||||
Computer supplies expense | 1,215 | |||||
Advertising expense | 550 | |||||
Mileage expense | 280 | |||||
Repairs expenseComputer | 870 | |||||
Total expenses | 24,587 | |||||
Net income | $ | 18,213 | ||||
BUSINESS SOLUTIONS | |||||||||||
Comparative Balance Sheets | |||||||||||
December 31, 2019, and March 31, 2020 | |||||||||||
Mar. 31, 2020 | Dec. 31, 2019 | ||||||||||
Assets | |||||||||||
Cash | $ | 74,897 | $ | 57,142 | |||||||
Accounts receivable | 24,167 | 5,168 | |||||||||
Inventory | 644 | 0 | |||||||||
Computer supplies | 2,025 | 520 | |||||||||
Prepaid insurance | 1,100 | 1,575 | |||||||||
Prepaid rent | 785 | 785 | |||||||||
Total current assets | 103,618 | 65,190 | |||||||||
Office equipment | 7,900 | 7,900 | |||||||||
Accumulated depreciationOffice equipment | (760 | ) | (380 | ) | |||||||
Computer equipment | 19,600 | 19,600 | |||||||||
Accumulated depreciationComputer equipment | (2,420 | ) | (1,210 | ) | |||||||
Total assets | $ | 127,938 | $ | 91,100 | |||||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 0 | $ | 1,120 | |||||||
Wages payable | 965 | 520 | |||||||||
Unearned computer service revenue | 0 | 1,800 | |||||||||
Total current liabilities | 965 | 3,440 | |||||||||
Equity | |||||||||||
Common stock | 105,000 | 80,000 | |||||||||
Retained earnings | 21,973 | 7,660 | |||||||||
Total liabilities and equity | $ | 127,938 | $ | 91,100 | |||||||
Required: Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2020. Owner Santana Rey contributed $25,000 to the business in exchange for additional stock in the first quarter of 2020 and has received
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